Croydon and Barking could prove to be property hotspots for canny investors, says Foxtons, pointing to historical data that reveals similar high-yield investment opportunities.
The estate agent reflects that 10 years ago, buyers targeted Hackney and Stoke Newington which have since seen rents and sales price growth exceed London averages; in Hackney, weekly rents have increased by 32% compared to 2010 and in Stoke Newington, they are up by 37%.
Croydon and Barking currently have similar apartment prices and rents to those last seen in Hackney and Stoke Newington a decade ago, according to Foxtons.
Its Winter 2022 London Lettings Report explains: “Capital growth is a medium to long-term objective, but in the meantime, areas such as Croydon and Barking offer a lower entry-point investment and enjoy above-average gross yields.”
Foxtons says London house prices have increased by 219% over the past 20 years, indicating that short-term challenges are normally outweighed by a long-term potential gain.
Growth in the London residential market (+78%) has also outpaced the UK residential market (+55%) and showed significantly better performance than both the FTSE 100 (+30%) and gold (+6%) in the last 10 years.
The report adds: “Increased property taxes and a potential rise in interest rates could be enough to steer potential investors into other investment classes, but history shows us that it’s at times like these that some of the best opportunities can be found.”
After its pandemic dip of 2020, the capital’s rental market, particularly in central London, has rebounded strongly. Demand remains high and the ratio of new renter registrations to new properties listed was above the three-year average throughout 2021.
“In terms of supply, new instructions continued to fall in Q4 2021, 42% below Q4 2020 levels but just 6% below Q4 2019 levels. By the end of 2021, average rents had exceeded the level that they reached before the pandemic.